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Precautionary saving in the large: nth degree deteriorations in future income

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  • Liu, Liqun

Abstract

Motivated by Eeckhoudt and Schlesinger’s (2008) general characterization of the precautionary saving motive against nth degree deteriorations in future income, this note generalizes the comparative precautionary premium analysis of Kimball (1990) for 2nd degree risk increases in future income to a comparative precautionary premium analysis for nth degree deteriorations in future income.

Suggested Citation

  • Liu, Liqun, 2014. "Precautionary saving in the large: nth degree deteriorations in future income," Journal of Mathematical Economics, Elsevier, vol. 52(C), pages 169-172.
    • Handle: RePEc:eee:mateco:v:52:y:2014:i:c:p:169-172
    DOI: 10.1016/j.jmateco.2013.12.004
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    References listed on IDEAS

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    Cited by:

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    2. Liqun Liu & William S. Neilson, 2019. "Alternative Approaches to Comparative n th-Degree Risk Aversion," Management Science, INFORMS, vol. 65(8), pages 3824-3834, August.
    3. Gollier, Christian, 2021. "A general theory of risk apportionment," Journal of Economic Theory, Elsevier, vol. 192(C).
    4. Christophe Courbage & Henri Loubergé & Béatrice Rey, 2018. "On the properties of high-order non-monetary measures for risks," The Geneva Papers on Risk and Insurance Theory, Springer;International Association for the Study of Insurance Economics (The Geneva Association), vol. 43(1), pages 77-94, May.
    5. AJ A. Bostian & Christoph Heinzel, 2018. "Comparative precautionary saving under higher-order risk and recursive utility," The Geneva Risk and Insurance Review, Palgrave Macmillan;International Association for the Study of Insurance Economics (The Geneva Association), vol. 43(1), pages 95-114, May.
    6. Nocetti, Diego & Smith, William T., 2015. "Changes in risk and strategic interaction," Journal of Mathematical Economics, Elsevier, vol. 56(C), pages 37-46.
    7. Sebastian Ebert & Diego C. Nocetti & Harris Schlesinger, 2018. "Greater Mutual Aggravation," Management Science, INFORMS, vol. 64(6), pages 2809-2811, June.
    8. Mensah, Edouard R. & Filipski, Mateusz J., 2022. "Saving for a rainy day: the impact of natural disasters on savings rates," 2022 Annual Meeting, July 31-August 2, Anaheim, California 322266, Agricultural and Applied Economics Association.
    9. Donatella Baiardi & Marco Magnani & Mario Menegatti, 2020. "The theory of precautionary saving: an overview of recent developments," Review of Economics of the Household, Springer, vol. 18(2), pages 513-542, June.
    10. Heinzel, Christoph, 2023. "Comparing utility derivative premia under additive and multiplicative risks," Insurance: Mathematics and Economics, Elsevier, vol. 111(C), pages 23-40.
    11. Mario Menegatti & Richard Peter, 2022. "Changes in Risky Benefits and in Risky Costs: A Question of the Right Order," Management Science, INFORMS, vol. 68(5), pages 3625-3634, May.
    12. Kit Pong Wong, 2019. "An interpretation of the condition for precautionary saving: the case of greater higher-order interest rate risk," Journal of Economics, Springer, vol. 126(3), pages 275-286, April.
    13. Christian Gollier, 2021. "A general theory of risk apportionment," Post-Print hal-04164327, HAL.
    14. AJ A. Bostian & Christoph Heinzel, 2018. "Comparative precautionary saving under higher-order risk and recursive utility," The Geneva Papers on Risk and Insurance Theory, Springer;International Association for the Study of Insurance Economics (The Geneva Association), vol. 43(1), pages 95-114, May.
    15. Wang, Hongxia & Wang, Jianli & Yin, Yick Ho, 2018. "Willingness to pay for stochastic improvements of future risk under different risk aversion," Economics Letters, Elsevier, vol. 168(C), pages 52-55.

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